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Haverhill to save $1.1m in health care costs

Haverhill Mayor James J. Fiorentini announced the city has reached an agreement with its local unions on a new health care plan for municipal employees and retirees that officials predict will save local taxpayers more than $1.1 million annually.

The plan, which is scheduled to go into effect with the start of the new fiscal year July 1, affects all city and school department employees and retirees except for those whose contracts run until 2014.

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The two sides reached agreement April 25, with the Public Employee Committee representing the city workers and retirees.

“The era of the $5 co-pay is over at last,” Fiorentini said. “The agreement marks the beginning of a new day for health care costs in our city.

“For years, our health care costs have risen faster than our revenues. In order to pay for the increases in health care costs, we have had to lay off employees, ask others to take furlough days, and cuts services to our citizens,” the mayor said, noting that before the agreement was reached, city officials were expecting health care costs to climb by 10 percent.

Under the new plan, co-pays for doctor visits will rise from $5 to $15. Municipal workers will pay 25 percent of the premium, up from 20 percent. Public employees hired after last July 1 will be expected to share an even higher percentage of the cost, shouldering 30 percent of the premiums.

The concessions were reached in part because of new health insurance bargaining rules, approved by state legislators last year, that allow municipalities to shift some of the burden of spiraling health care to their employees without having to go through the collective bargaining process. The law, for the first time, allowed cities and towns some flexibility to redesign health care plans.

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Statewide, the law is expected to save cities and towns more than $100 million in its first year, according to a recent report by the Massachusetts Taxpayers Foundation, a business-funded fiscal watchdog group that advocated for the law. Haverhill is one of nine communities that adopted the law and implemented health plan changes.

Fiorentini lauded the city unions and the retiree representatives on the Public Employee Committee for helping the city to “design a plan that everyone could live with.”

The anticipated savings was announced as city leaders learned that the House’s state budget proposal includes $2.4 million in funding for Haverhill to help cover the city’s Hale Hospital debt. That debt costs taxpayers about $8.5 million annually.

If it’s included in the state’s final spending plan, the funding would bridge a looming budget shortfall, freeing up cash for repairs to aging public buildings, Fiorentini said.

The mayor praised Democratic state Representative Brian S. Dempsey, chairman of the House Committee on Ways and Means and chief author of the House budget, who he said had once again come through for his hometown.

The House spending plan now goes to the Senate for review. Once both bodies sign off on a budget blueprint, the plan will be sent to the governor for his signature.

Brenda J. Buote may be reached at brenda.buote@gmail.com.

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